Understanding our money behaviour: All or nothing

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All-or-nothing thinking happens when we think in extreme, absolute terms.

There are no shades of grey when you think in such a binary way. You’re either a success, or a failure.

This could be reflected in patterns of thinking such as, “I didn’t put away 10% of my wage when I first started working. it’s already too late so why bother savings at all?” or “I have so many bills that I can only save $20 a week. What’s the point?”

The problem with all or nothing thinking is that it can disrupt any attempts to change your behaviour and habits. For example, if you want to create and stick to a budget there’s a good chance that even one slip up will derail all of your efforts.. All-or-nothing thinking will have you believe that you’ve totally failed, and that you might as well throw the budget out the window.

If you find yourself thinking this way, it can be helpful to acknowledge that there are lots of shades of grey between the black and white extremes. Acknowledge the small steps and achievements, and replace the negative messages with rational, positive ones:

  • “I’ve managed to make a budget that works for me most of the time, and I can keep refining i.

  • “I haven’t paid off all my debt, but I’m sticking to my repayments and the balance is actually going down.”

  • "Every bit of saving gets me closer to my goal."

  • “I’m changing my money behaviour one habit at a time.”